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THE FIRST QUARTER WAS THE WORST THREE-MONTH stretch for dividends since Standard & Poor's began tracking payouts in 1956. According to senior index analyst Howard Silverblatt, S&P 500 companies reduced dividends by $42 billion in the period -- a total exceeding the $40.6 billion sliced off payouts in all of 2008, then a record for a year.

Looking at the first quarter's overall dividend activity, S&P, which surveys approximately 7,000 publicly owned corporations, could find only 193 dividend boosts -fewer than half the 475 increases seen in the January-March 2008 stretch and roughly one-third of the 621 hikes recorded in 2007's initial quarter.

The number of extra dividends slumped 33%, to 78 from 116.

Resumed payouts provided a small measure of cheer, rising to a dozen in the first quarter from seven a year earlier.

The rise in negative actions, however, was horrific. By S&P's count, 222 corporations cut their payouts in the first quarter. That compared with only 38 in the corresponding 2008 stretch and a mere 13 in the like 2007 span.

The total number of omitted dividends surged to 145, against only 45 in last year's first quarter and six in 2007's.

S&P's Silverblatt expects the current quarter to be slightly worse than the first, and the third quarter to continue the dreary trend. As for the fourth quarter, "currently, we believe we have seen the majority of damage in dividends, with many companies (especially ones with a history of increases) deciding that they can ride out the recession," says Silverblatt. But, he warns, come August and September, when those companies set their new budgets, "if they don't see a better 2010, they will cut [dividends]."

THE 65 DOW STOCKS RACKED up nearly a dozen dividend enrichments in the first quarter, versus five cuts and omissions.